InsiderOnline Blog: July 2013

• Learn how to investigate the Internal Revenue Service. Hillsdale College and the AWC Family Foundation will host a talk by Cleta Mitchell. The talk begins at noon on July 29 at Hillsdale’s Allan P. Kirby, Jr. Center for Constitutional Studies and Citizenship in Washington, D.C.

• Hear why expanding Medicaid is a bad idea for Michigan. The Mackinac Center for Public Policy will host a discussion with the Manhattan Institute’s Avik Roy at the Watermark Country Club in Grand Rapids, Michigan. The event begins at 5:30 p.m. on July 30.

• Celebrate the life and work of the man who showed the world how freedom, free choice, and free markets give people better lives. The 101st anniversary of Milton Friedman’s birthday is July 31 2013. Check the Friedman Foundation for Educational Choice’s Friedman Legacy Day event map to find an event near you.

• Hear “Two Voices for School Choice.” The Pioneer Institute will host a talk with The Heritage Foundation’s Lindsey Burke and the Cato Institute’s Jason Bedrick on July 31. The talk begins at 5 p.m. at the Omni Parker House in Boston.

• Students, head to Washington, D.C., where you’ll find two different student conservative conferences next week: The Young America’s Foundation’s National Conservative Student Conference will be July 29 to August 3 at George Washington University; meanwhile, the Young Americans for Liberty’s National Convention will be nearby in Arlington, Va., and will run from July 31 to August 3. YAF has Ben Carson, T. Boone Pickens, Robert George, and Bay Buchanan. YAL has both Ron Paul and Sen. Rand Paul, as well as Don Devine, Remy, and Lawrence Reed. Sen. Mike Lee and Sen. Ted Cruz will each make appearances at both events.

The Dodd-Frank financial regulation law was passed three years ago this week. As Diane Katz notes, the law’s major accomplishment seems to have been to drive up fees and dry up credit:

As of July 1, nearly 63 percent of the rulemaking deadlines have been missed. Preliminary proposals have not been prepared for more than one-third of the rules still outstanding.

Dodd–Frank’s onerous regulatory demands are driving up banking fees, and regulatory uncertainty is prompting banks to be cautious about extending credit. The House Financial Services Committee estimated that the Dodd–Frank regime would impose at least $27 billion in new assessments on financial firms and require more than 2.2 million annual labor hours—the equivalent of 56,516 work weeks—to comply with just the first 10 percent of rules issued.

Consider the effect on checking accounts, for example. Only 39 percent of banks in 2012 offered a checking account with no minimum balance requirement and no monthly fee, compared to 45 percent in 2011 and 76 percent in 2009. Meanwhile, the minimum account balance needed to avoid a monthly fee has nearly doubled in the past two years, to $6,118. [Internal citations omitted.] [The Heritage Foundation, July 19]

University of Buffalo’s urban studies professor Henry Louis Taylor toldBlack Detroit, a local magazine, these establishments might constitute only about 10 percent of the city’s businesses — but they serve about 70 percent of residents.

A few of them might pose genuine public health issues. But the vast majority are being cited for technical violations like not having the proper zoning clearances or licenses or being behind on their taxes.

So a mayor who pleads he doesn’t have the resources to: provide street lights to half the city or arrange timely trash pickup or control Detroit’s soaring murder rate nevertheless has enough inspectors to unleash on poor residents trying to eke out a living. [Shika Dalmia, Reason, July 23]

The summer issue of The Insider is out, featuring some big-picture thinking from Peter Boettke, Ed Feulner, and a few other talented writers. From the editor:

If you count all the things that voters appear to expect government to continue doing, like handing out Social Security checks and running health insurance programs for seniors, then the federal government is bankrupt right now.

It’s tempting to implore the government to do what a responsible household does upon discovering it’s spending more than it’s taking in: Tighten the belt by cutting inessential items out of the budget. The great Adam Smith was thinking along those lines when he said: “What is prudence in a private family could scarce be folly in a great kingdom.”

But budgets are not the same constraint on governments that they are on households. As Peter Boettke observes in our cover story, the tendency of all democracies “is to concentrate benefits in the short run on the well-informed and organized interest groups, and to disperse the costs in the long run on the unorganized and ill informed.” More bluntly: There’s a lot of robbing Peter to pay Paul that can be done before the government’s creditors come calling; and the prospect that they’ll come doesn’t make Paul less happy to keep voting for the robbing.

Canadians lost 1.2 million weeks of productive work while waiting for medically necessary care in 2012, calculates Nadeem Esmail of the Fraser Institute. The value of that lost productivity was approximately $982 million—“an average of about $1,129 for each of the estimated 870,462 Canadians waiting for treatment in 2012,” says Esmail. “Alternatively, that cost works out to roughly $10,260 for each individual among the 11.0% of patients in the queue who were suffering considerable hardship while waiting for care.” [“The Private Cost of Public Queues for Medically Necessary Care,” by Nadeem Esmail, Fraser Institute, July 2013]

… says Robert P. George, newly elected Chair of the United States Commission on International Religious Freedom:

For my part, I believe that reason has a very large role to play for each of us in deciding where spiritual truth most robustly is to be found. And by reason here, I mean not only our capacity for practical reasoning and moral judgment, but also our capacities for understanding and evaluating claims of all sorts: logical, historical, scientific, and so forth. But one need not agree with me about this in order to affirm with me that there is a distinct human good of religion—a good that uniquely shapes one’s pursuit of and participation in all the aspects of our flourishing as human beings—and that one begins to realize and participate in this good from the moment one begins the quest to understand the more-than-merely-human sources of meaning and value and to live authentically by ordering one’s life in line with one’s best judgments of the truth in religious matters.

If I am right, then the existential raising of religious questions, the honest identification of answers, and the fulfilling of what one sincerely believes to be one’s duties in the light of those answers are all parts of the human good of religion. But if that is true, then respect for a person’s well-being, or more simply respect for the person, demands respect for his or her flourishing as a seeker of religious truth and as one who lives in line with his or her best judgments of what is true in spiritual matters. And that, in turn, requires respect for everyone’s liberty in the religious quest—the quest to understand religious truth and order one’s life in line with it.

Because faith of any type, including religious faith, cannot be authentic—it cannot be faith—unless it is free, respect for the person—that is to say, respect for his or her dignity as a free and rational creature—requires respect for his or her religious liberty. That is why it makes sense, from the point of view of reason, and not merely from the point of view of the revealed teaching of a particular faith—though many faiths proclaim the right to religious freedom on theological and not merely philosophical grounds—to understand religious freedom as a fundamental human right. [Witherspoon Institute, July 24]

One-hundred and nineteen former lobbyists currently work for the Obama administration, despite the President’s executive order restricting the hiring of lobbyists. Meanwhile, 37 former Obama administration officials now work as lobbyists, despite the administration’s claims to have ended the revolving door between industry and government.

That’s Conor McGrath’s tally, published recently in the Journal of Public Affairs. Apparently, there are lots of loopholes for lobbyists who want to work for President Obama, including not having been registered as a lobbyist in the past two years, having never been registered as a lobbyists (though in fact still being a lobbyist), having done only lobbying that’s unrelated to the government job, promising to recuse oneself from work related to previous lobbying, or otherwise getting a waiver. A few seem to have been simply appointed in spite of the rules. [h/t: Tim Carney, Washington Examiner, July 23]

In calling on the Department of Justice to bring civil rights charges against George Zimmerman in the shooting death of Trayvon Martin, lots of liberals have conveniently forgotten the constitutional prohibition against double jeopardy. The American Civil Liberties Union’s own executive director, Anthony Romero, is one of those liberals, but the ACLU itself has a different view of the issue. In a letter to Attorney General Eric Holder last Thursday, Laura Murphy, director of the ACLU’s Washington Legislative Office said:

Even though the Supreme Court permits a federal prosecution following a state prosecution, the ACLU believes the Double Jeopardy Clause of the Constitution protects someone from being prosecuted in another court for charges arising from the same transaction. A jury found Zimmerman not guilty, and that should be the end of the criminal case.

It was the four liberals of the Supreme Court who dissented from the 1959 decision that created an exception for “dual sovereignty” prosecutions, notes Walter Olson, who highlights some passages from Justice Hugo Black’s dissent:

“Fear and abhorrence of governmental power to try people twice for the same conduct is one of the oldest ideas found in western civilization,” one that did not disappear “even in the Dark Ages.” And “retrials after acquittal have been considered particularly obnoxious, worse even, in the eyes of many, than retrials after conviction.” In short, “double prosecutions for the same offense” are “contrary to the spirit of our free country.”[Overlawyered, July 21]

• Get an update on the ObamaCare train wreck. Grace-Marie Turner of the Galen Institute and Christie Herrera of the Foundation for Government Accountability will speak at the next Conservative Women’s Network, hosted by the Clare Boothe Luce Policy Institute and The Heritage Foundation. The talk begins at noon on July 25 at The Heritage Foundation. Men are welcome, too!

• If you know somebody whose behind-the-scenes work makes a difference for freedom, nominate him or her for the Vernon K. Krieble Foundation’s Unsung Hero Award. The winner will receive a prize of $25,000 and recognition at the State Policy Network’s Annual Meeting in Oklahoma City, Okla. To be considered, nominations must be received by August 23, 2013.

• Find out if Hassan Rouhani will liberalize Iran. The Heritage Foundation will host a panel discussion on the new Iranian President, featuring Kenneth Katzman of the Congressional Research Service, James Phillips of The Heritage Foundation, and Henry Sokolski of the Nonproliferation Policy Education Center. The discussion begins at noon on July 24.

• Save the dates:—The 101st anniversary of Milton Friedman’s birthday is July 31 2013. Check the Friedman Foundation for Educational Choice’s Friedman Legacy Day event map to find an event near you.—The Young America’s Foundation’s National Conservative Student Conference will be July 29 to August 3 at George Washington University in Washington, D.C.

There was a bombshell in this week’s hearings on Internal Revenue Service targeting of Tea Party non-profits, says Peggy Noonan, who summarizes the testimony:

In April 2010, [Carter] Hull was assigned to scrutinize certain tea-party applications. He requested more information from the groups. After he received responses, he felt he knew enough to determine whether the applications should be approved or denied.

But his recommendations were not carried out.

Michael Seto, head of Mr. Hull’s unit, also spoke to investigators. He told them Lois Lerner made an unusual decision: Tea-party applications would undergo additional scrutiny—a multilayered review.

Mr. Hull told House investigators that at some point in the winter of 2010-11, Ms. Lerner’s senior adviser, whose name is withheld in the publicly released partial interview transcript, told him the applications would require further review:

A: “She did not say whether she agreed or not. She said it should go to chief counsel.”

Q: “The IRS chief counsel?”

A: “The IRS chief counsel.”

The IRS chief counsel is named William Wilkins. And again, he is one of only two Obama political appointees in the IRS. […]

Ms. Hofacre of the Cincinnati office testified that when she was given tea-party applications, she had to kick them upstairs. When she was given non-tea-party applications, they were sent on for normal treatment. Was she told to send liberal or progressive groups for special scrutiny? No, she did not scrutinize the applications of liberal or progressive groups. “I would send those to general inventory.” Who got extra scrutiny? “They were all tea-party and patriot cases.” [Wall Street Journal, July 18]

Mens rea—Latin for “guilty mind”—is a legal concept that once commonly protected people from prosecution for unknowingly violating a law. But Congress has increasingly written laws that create either a strict liability regime or fail to specify an intent requirement. How bad is the problem? Paul Rosenzweig:

The best estimate available puts the number of federal crimes at 4,500, but if these numbers are only an estimate, it is obviously impossible to answer the even more detailed question of how many of the crimes do not have [an intent] requirement.

Researchers from The Heritage Foundation and the National Association of Criminal Defense Lawyers, however, began to create an estimate of the extent to which a lack of mens rea requirements is infecting federal criminal law. This study revealed that of the 446 criminal proposals advanced in Congress during the 109th Congress, 25 percent (113 bills) had no intent requirement. And that carried forward into enactment: Of the 36 new criminal statutes passed by the 109th Congress, nine (again, a full quarter) had no intent requirement at all. In short, Congress created nine new strict liability crimes where a “defendant’s knowledge, intent, misperceptions, mistakes, or accidents are essentially irrelevant to his innocence or guilt.”

One example, selected at random, demonstrates the point far better than all statistics could. The Youth Worker Protection Act (H.R. 2870), had it been enacted, would have made it a crime “to employ a youth” in the sale of goods in a public place (in other words, you cannot use a child to “peddle”). No intent would have been required, so the government would not have had to prove either that an individual knew the person he or she employed was a youth or that he or she knew the sale of goods occurred in a public place. The government also would not have had to prove that an individual knew it was illegal to employ children to sell candy on the street. Had this law passed and had a man thereafter given his grandson five dollars to set up a lemonade stand on the corner, that man would have been a felon—without any need to prove criminal intent at all. [Internal citations omitted.] [The Heritage Foundation, July 18]

Rosenzweig suggests that one fix—besides Congress making sure it writes mens rea requirements into the laws it passes—would be for Congress to pass a statute that simply says when Congress fails to specify whether intent is required to convict, then courts should assume that Congress meant to include a mens rea element in the law.

On Friday, the Hobby Lobby won a preliminary injunction that prevents the Department of Health and Human Services from enforcing its contraception/abortion-drug mandate against the company. The retail chain, represented by the Becket Fund, says the mandate violates its First Amendment right to the free exercise of religion.

Last month, the 10th U.S. Circuit Court of Appeals overturned a district court denial of the Hobby Lobby’s injunction request and remanded the case back to the district court. The appeals court found that Hobby Lobby had “established a likelihood of success that their rights under this statute are substantially burdened by the contraceptive-coverage requirement, and have established an irreparable harm.”

As the Becket Fund says: “This is a major victory for not only Hobby Lobby, but the religious liberty of all for-profit businesses.” [Becket Fund, July 19]

No marketing idea appears too wacky for those charged with promoting the ObamaCare exchanges. We noted last week that HHS Secretary Sebelius had tried (and failed) to enlist the help of the National Basketball Association and the National Football League in promoting the exchanges to the leagues’ younger fan bases. Here are a few even wackier ideas, compiled by Eric Boehm:

• Connecticut’s exchange, Access Health CT, has signed up as a sponsor of Sailfest 2013, and will hand out bottles of suntan lotion that urge attendees of the annual celebration in New London to “Get Covered.”

• The PR firm hired by California to promote its exchanges has explored the possibility of writing the exchange into the plotlines of primetime television shows like Modern Family and Grey’s Anatomy.

• Oregon hired a guitar-strumming hipster to sing a ditty called “Live Long in Oregon.”

• Washington State is considering putting ads on the front of portable toilets at music festivals. [Watchdog.org, July 16]

Earlier this month, the Department of Health and Human Services said it would not be able to verify eligibility for ObamaCare’s exchange subsidies and would rely instead on the information applicants submit. Here’s a picture of the bureaucratic nightmare that isn’t working:

Chris Jacobs:

The process for determining subsidy eligibility could require 21 different steps, involving at least five separate entities—the Social Security Administration, the Department of Homeland Security, the Department of Health and Human Services, the Internal Revenue Service, and state exchanges—and utilizing a process called the Income and Family Size Verification Project. [The Foundry, July 19]

Technophobia—the fear that automating work will lead to mass unemployment—is a disease that is strangely persistent against the evidence of history, observes Scott Winship:

The computer was invented and subsequently the fastest one increased in speed by a factor of 100,000. Unemployment fell to around five percent from 1930’s nine percent. Median earnings doubled. Yet a self-appointed committee of public intellectuals declared in a letter to the President that a “cybernation revolution” was at hand, the product of “the combination of the computer and the automated self-regulating machine.” The revolution was producing “a system of almost unlimited productive capacity which requires progressively less human labor.” The year was 1964.

Between 1964 and 2007, on the eve of the Great Recession, the earnings of the median working-age male rose by about one-third, and while most of that came during the 1960s, men’s earnings did rise modestly after 1969. Median earnings among female workers more than doubled after 1969. Median household income rose by about 75 percent. The typical age at retirement declined, and leisure time increased among both working age men and women. Unemployment was no higher than five percent, even accounting for adults not included in official figures because they had stopped looking for work out of discouragement. The computing speed of the fastest computer rose by a factor of one billion. With a “b.” But we cannot shake technophobia. The sense remains that the next one-billion-fold increase in technological progress will be different. [Real Clear Politics, July 16]

The problem, as Winship points out, is that it is easy to see the jobs that will go away because of technology, but really hard to imagine the new jobs that technology will create. How many in 1985, besides science fiction writer Orson Scott Card, predicted blogging?

A number of states, including Kentucky and North Carolina, are treating advice as if it isn’t speech protected by the First Amendment. Authorities in those states have claimed that their licensing laws for professions like dietician and psychologist apply to columnists who give diet advice or parenting advice. As the Institute for Justice points out, that kind of regulation is an attack on the First Amendment that will make criminals of a lot of people who are just trying to help:

What’s holding up high-speed Internet in some areas? Probably the local governments and public utilities that see rights of way and “pole attachment” contracts as cash cows that get bigger when they restrict access, argue Berin Szoka, Matthew Starr, and Jon Henke:

Local governments and their public utilities charge ISPs far more than these things actually cost. For example, rights of way and pole attachments fees can double the cost of network construction.

So the real bottleneck isn’t incumbent providers of broadband, but incumbent providers of rights-of-way. These incumbents—the real monopolists—also have the final say on whether an ISP can build a network. They determine what hoops an ISP must jump through to get approval. […]

Other kickbacks arguably include municipal requirements for ISPs such as building out service where it isn’t demanded, donating equipment, and delivering free broadband to government buildings.

And, as Szoka, Starr, and Henke note, the Federal Communication Commission’s National Broadband Plan hasn’t accomplished anything except provoking lawsuits from states and localities that want to preserve their negotiating power over the cable companies. But franchising fees are a hidden tax, and like all taxes they discourage investment. Some states have figured that out. Don’t be surprised if Kansas, Missouri, and Texas—all of which have streamlined their franchising laws—gain a competitive advantage in broadband deployment. [Wired, July 16]

• Young professionals and interns, learn what you need to know about workplace etiquette. The America’s Future Foundation will host a panel on professional etiquette featuring Karin Agness of the Network of enlightened Women, Paul Teller of the Republican Study Committee, Peter Redpath of the Federalist Society, and Kristen Soltis Anderson of the Winston Group. The panel begins at 2 p.m. in 2322 Rayburn House Office Building on Capitol Hill.

• Nominate an outstanding publication for a $10,000 prize. The Atlas Foundation is now accepting nominations for the 2013 Sir Antony Fisher International Memorial Award, which will recognize “outstanding publications produced by independent public policy research institutes that have made the greatest contributions to the public understanding of a free society.” Works published in 2012 or 2013 are eligible for the prize. To nominate a publication, submit by August 15 five copies of the publication along with a nomination letter to Atlas Network, c/o Gonzalo Schwarz, 1201 L Street NW, Washington, DC 20005. If you have questions or want more information, email Gonzalo.Schwarz@AtlasNetwork.org.

It should surprise no one that the cost-benefit analyses produced by federal agencies always show their proposed regulations yield benefits that exceed costs. Writing in the latest issue of Cato’s Regulation magazine, Susan Dudley observes that, in the hands of regulators, cost-benefit analysis is a process of quantifying “every conceivable good thing that they can attribute to a decision to issue new regulations,” while counting only “the most obvious direct and intended costs of complying with the regulation.”

• More than half of the calculated benefits of federal regulations counted in the Office of Management and Budget’s annual report on the costs and benefits of economically significant regulations come from reductions in a single pollutant: fine particulate matter.

• For many regulations, much of the calculated benefits come from reductions in fine particulate matter—even though reducing fine particulate matter was not the purpose of those regulations. For four such regulations in 2010, 100 percent of the claimed benefits came from reducing fine particular matter.

• Estimates of the benefits of reducing fine particulate matter rest on six key assumptions—including that there actually is a causal relationship between mortality and levels of fine particulate matter and that the relationship exists even at low levels. If any of those assumptions are false “the benefits of reducing [fine particulate matter] would be less than estimated and perhaps even zero.”

• The method of assigning a value to mortality risk reduction assumes every beneficiary is a healthy, working-age person with a long life ahead of him.

• Beyond reducing fine particulate matter, the source of most of the rest of the calculated benefits of economically significant federal regulations is saving consumers money. Those savings are achieved by regulations that force consumer products to be more energy efficient than they would otherwise be. That is to say, regulators are actually counting restrictions on consumer choice as a benefit. But nowhere do they count as a cost the loss to consumers of product features for which they are willing to pay. [“OMB’s Reported Benefits of Regulation: Too Good to Be True?” by Susan Dudley, Regulation, Summer 2013.]

And that brings us to this bit of news: Environmental organizations such as the Scottish Wildlife Trust, the Royal Society for the Protection of Birds, and the John Muir Trust have started a campaign to put Scotland’s peat off limits to commercial extraction by 2020. Peat, of course, isn’t just another fuel for heating your home. It’s what gives Scotch whisky its distinctive smoky character. [Brisbane Times, July 12]

Scottish literary historian David Daiches tells us: “The proper drinking of Scotch whisky is more than indulgence: it is a toast to civilization, a tribute to the continuity of culture, a manifesto of man’s determination to use the resources of nature to refresh mind and body and enjoy to the full the senses with which he has been endowed.”

Continuity of culture or biodiversity? Toasting civilization or keeping a little more carbon in the ground? If you whisky drinkers aren’t sure about switching your habit for the sake of habitat, just wait till the regulators give you their numbers.

As of this week, Illinoisans can get a permit to carry a concealed firearm. The legislature overrode Gov. Pat Quinn’s veto of legislation that had been passed to satisfy a court deadline to legalize gun ownership. That had been triggered by the Supreme Court’s decision in McDonald v. City of Chicago that the Second Amendment right to keep and bear arms is an individual right that states must respect. From Jeff Dege at Radical Gun Nuttery (h/t: Volokh Conspiracy), here is what the spread of gun rights since 1986 looks like:

Eugene Volokh: “In the same era that the top mainstream media stories about gun laws have been about gun control, the most practically significant movement on gun law has been this movement of (limited) gun decontrol.”

Last week’s military coup in Egypt is really an opportunity for democracy to work again in that country, writes Michael Rubin:

Last November, just five months into his presidency and with deliberations over a new constitution deadlocked, [Mohammed] Morsi seized dictatorial power. As guardian of the revolution, he argued, his power should trump the judiciary. If the Egyptian people wanted constitutional order, his allies suggested, they should approve the constitution the Muslim Brotherhood drafted in the absence of any quorum.

The Egyptian people — forced to choose between a one-man dictatorship or a flawed constitutional order — narrowly approved the constitution, ending Morsi’s brief autocracy but giving him what he wanted even more: Imposition of the Brotherhood’s religious agenda on a population that wanted jobs, not Islamic law. One article, for example, charged the state with protecting public morality, which Morsi interpreted in the most conservative, religious manner. […]

Morsi trampled human rights and denied women and minorities equality. The public did participate, but not in the way Morsi hoped: 20 million Egyptians signed petitions calling for the president’s ouster. […]

Rather than punish the perpetrators, Obama should offer two cheers for Egypt’s generals and help Egyptians write a more democratic constitution to provide a sounder foundation for true democracy. [New York Daily News, July 7]

Kim Holmes has a similar take:

According to Section 508 of the Foreign Assistance Act, the U.S. government is barred from giving “any assistance [to] the government of any country whose duly elected government is deposed by a military coup d’etat or decree.” That is pretty clear: If what happened in Cairo is a coup, then U.S. aid would eventually have to be cut off. It could be restored provided a new democratic government is elected. Mr. McCain is right: U.S. aid is in jeopardy.

But is he right that aid should be terminated now? I think not. It would be better to wait until the situation is clearer before making that decision. The president has no official waiver authority, but he does have discretion and therefore time to consider the right course of action. It may be that the army will not call elections; or it may use excessive force against its opponents. If this happens, it will be difficult if not impossible to continue aid.

On the other hand, elections may be called, in which case it could be some time before we know whether democracy is established.

These complexities show that our aid policy is much too simplistic. It’s not just about coups or elections, but about whether a society is mature enough to create a stable democratic order. What Egypt needs is a prolonged period of political peace in which to plant the values and build the institutions of a representative democracy. If a new election produces yet another authoritarian ruler, no matter whether the vote is free or not, we should not bless that outcome by calling it “democratic.” Instead we should cut off aid.

At the same time we should start insisting that Egyptian parties take up the cause of economic reform. No one — most assuredly not the army — is talking about the reforms needed to turn Egypt’s economy around. Unless they do, our aid will be wasted. [The Heritage Foundation, July 12]

Last Friday, the Department of Health and Human Services announced that the verification systems needed to determine eligibility for ObamaCare subsidies would not be ready by October 1, and that the program would instead rely on self-reported data to determine eligibility. Shorter version: If you lie to the government, the government will give you a tax credit.

This decision, as Michael Cannon observes, “effectively expanded the eligibility criteria for ObamaCare’s new entitlements without so much as consulting Congress.” [Cato-at-Liberty, July 9] And it follows the Department of Treasury’s announcement earlier last week that it was suspending the reporting requirements on which enforcement of the employer mandate depends, ostensibly because the reporting requirements were too complex for businesses to follow.

If employers don’t have to pay a penalty for not providing their workers qualifying health insurance, and individuals can get subsidized coverage—as well as avoid the tax penalty for not having qualifying health insurance—by fibbing about their incomes with no risk of getting caught, then more individuals are going to end up in the ObamaCare exchanges.

So was funneling more people into the exchanges the real purpose for these two decisions? Betsy McCaughey says it’s so: “The delay is the administration’s desperate strategy to prop up the health exchanges […] . The administration fears an under-enrollment crisis.” [Betsymccaughey.com, July 10]

Why wouldn’t everyone just want to sign up? By the lights of those who wrote the law, ObamaCare “fixes” health insurance by preventing insurers from charging different rates or turning people away based on health status, and by preventing insurers from offering inexpensive plans that provide limited coverage. The only way that set-up can happen without making premiums too high is to force the young and the healthy to participate, too. But, as Joseph Antos and Michael Strain explained back in July of last year, the ObamaCare individual mandate has no real teeth:

First, the tax (nee penalty) is too small to matter to the people who are its target. In 2014, the tax will be the larger of $95 or 1 percent of taxable income for an individual. By 2016 it rises to $695 or 2.5 percent of income. Young people would not want to pay a dollar if they could avoid it, but avoiding the tax means signing up for insurance that many do not think they need. That insurance is not free. Even with subsidies, they will pay at least 3 percent of their incomes for premiums and up to 6 percent of the cost of the insurance in deductibles and copayments. That adds up to a lot more than 95 bucks.

Second, the law counts on most of the scofflaws turning themselves in. If you do not have insurance and think you owe the tax, then you will be asked to check a box to that effect on your tax return. If you choose to ignore the mandate, you might also choose not to check the box. But even those who do confess that they do not have insurance may not be liable for the new tax. Illegal aliens, Native Americans, prisoners, those who are without insurance for less than 3 months, those who do not have to file an income tax return, anyone who faces a hardship or cannot find affordable coverage, and others are all exempt. […]

[E]ven if the IRS has determined that you owe the new tax, it has very limited ability to force you to pay it. Basically, the IRS has two options: To ask you for the money and to reduce the size of your tax refund. But the IRS cannot reduce your refund unless you overpay. Since taxpayers have great control over their withholding, a savvy taxpayer who does not want to buy insurance could easily work the system to ensure that the IRS could not hold back his refund to enforce the mandate tax. And half of American households do not owe any income tax to begin with, so good luck getting the money from them. [The American, July 17, 2012]

Betsy McCaughey calculates that the total cost to taxpayers of covering the additional workers who get health insurance from an ObamaCare exchange instead of their employers will be $60 billion in 2014—and that’s not counting the cost of covering individuals who will obtain the subsidies fraudulently because the verification system isn’t ready. [Betsymccaughey.com, July 10]

And the Wall Street Journal points out that if the ObamaCare subsidies suffer just the same error rate as that of the Earned Income Tax Credit (21 percent to 25 percent), then ObamaCare will spend $250 billion in improper benefits in the first decade.

So, if you don’t sign up, you’re just paying for somebody else’s insurance. The Obama administration, it seems, has created a system that makes you a sucker if you don’t lie. This set-up also insulates members of Congress from political accountability. Now they can all say: “That’s not the program we voted for.” And they would be telling the truth.

The hurdle of standing would make it hard to challenge the Obama administration’s delay of the ObamaCare employer mandate in court. Nevertheless, “the president gets to do what he wants” isn’t really how government is supposed to work in a constitutional republic. As Michael McConnell points out, we elect a President, not a King:

Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. While the president does have substantial discretion about how to enforce a law, he has no discretion about whether to do so.

This matter—the limits of executive power—has deep historical roots. During the period of royal absolutism, English monarchs asserted a right to dispense with parliamentary statutes they disliked. King James II’s use of the prerogative was a key grievance that lead to the Glorious Revolution of 1688. The very first provision of the English Bill of Rights of 1689—the most important precursor to the U.S. Constitution—declared that “the pretended power of suspending of laws, or the execution of laws, by regal authority, without consent of parliament, is illegal.” […]

With the exception of Richard Nixon, whose refusals to spend money appropriated by Congress were struck down by the courts, no prior president has claimed the power to negate a law that is concededly constitutional.

In 1998, the Supreme Court struck down a congressional grant of line-item veto authority to the president to cancel spending items in appropriations. The reason? The only constitutional power the president has to suspend or repeal statutes is to veto a bill or propose new legislation. Writing for the court in Clinton v. City of New York, Justice John Paul Stevens noted: “There is no provision in the Constitution that authorizes the president to enact, to amend, or to repeal statutes.” […]

As the Supreme Court said long ago (Kendall v. United States, 1838), allowing the president to refuse to enforce statutes passed by Congress “would be clothing the president with a power to control the legislation of congress, and paralyze the administration of justice.” [Wall Street Journal, July 8]

What kind of compromise on immigration reform could be worth having, if President Obama can decide not to enforce the security provisions he does not like?

The IMANI Center for Policy & Education was founded in 2004 in Ghana and is already one of the top think tanks in Africa. The University of Pennsylvania’s Think Tanks and Civil Societies Program ranks it the eighth best think tank in sub-Saharan Africa (tops in Ghana), the 10th best think tank with an annual operating budget under $5 million, and 25th in think tanks with the most innovative policy ideas/proposals. We asked IMANI Founder and President Franklin Cudjoe a few questions about IMANI’s work:

InsiderOnline: When you first started up the IMANI Center for Policy & Education, how challenging was it to get policymakers to listen to your ideas?

Franklin Cudjoe: Very challenging. Getting noticed by policy makers happens when the media gives you a platform. Incidentally our media at the time could only help after a good run of publication of policy opinions. Another factor was the dominance of our competitors in the media space. Today IMANI’s “competitors” in Ghana are on average more than four times older, with extensive networks across governmental and corporate circles, and thus a pedigree borne of the privilege that such access endows. It is therefore quite fascinating that IMANI is frequently cited as being in the same league as the most prestigious of these institutions. Since May 2008, our media metrics have consistently shown IMANI to be number one among Ghanaian institutions for “web presence” and number two when it comes to citations in the print press. Its profile in the broadcast media has also improved dramatically in recent times.

IO: Nine years later, the Center, with only six full-time employees, is already ranked as one of the most influential think tanks in Africa. How did you manage to build the Center’s reputation so quickly?

FC: We knew we were not well endowed financially, so we focused on building expertise in designing specific and rigorous tools in applying free-market solutions to an array of complex social problems. Crisp, clear, compelling data—or what we also call evidence-based advocacy—we thought was the most useful tool to provide to any media outlet; and it’s easy for the media to use without interpretation.

IO: What are the three most important problems that Ghana needs to fix?

FC: 1. The presidency is too powerful. It has become the strategic hub for policy planning from a financial and technical point of view. Political accountability resides in the executive, and that is enough. For most strategic projects, the requisite expertise may be spread across multiple ministries, departments, and agencies. The Cabinet Office with professional staffers rather than political appointees should be strengthened and given powers that allow it to coordinate expertise across the civil service.

2. Education prospects have weakened: The Ghana Education Reform Project has now run for five years, but not without disruption. The change of government at the turn of 2009 saw the duration of the secondary education program reversed from four years to three years. Apart from this action no significant work has been done to review the trajectory of the reform. A good example of the dysfunction is the distribution of free computer hardware without a corresponding effort to develop and disseminate even more vital software learning tools and content.

3. Wasteful projects continue: Even though we all applauded the decision to go biometric in the 2012 election, every objective observer knew we have already collected biometric details of citizens for the following purposes: national passports, the e-Zwich payments platform, and the national identification system. It has been proposed that we do the same for voter ID cards, drivers’ licences, and National Health Insurance Scheme cards. A harmonised system means you may be able to use one card for multiple systems. We believe we can save $250 million harmonising these biometric ID systems.

• Learn about the government’s passion for classifying things “top secret” and the threat it poses to government transparency and everyone’s freedom. Thomas Joscelyn of the Foundation for the Defense of Democracies and Cully Stimson of The Heritage Foundation will speak at The Heritage Foundation at noon on July 9.

• And don’t forget: If you are in the DC area tomorrow, stop by the 42nd National Fourth of July Soiree at Bull Run Regional Park in Centreville, Va., on July 4 from 11 a.m. to 3 p.m.

When in the Course of human events, it becomes necessary for one People to abandon the Principles which have hitherto guided them, and to embrace the more progressive Ideals which their quest for Equality, Fairness, and social Justice demands of them, a decent Respect to the Opinions of the global Community requires that they should declare the Causes which impel them to the Separation.

We hold these Values to be self-evident, that all human Beings are born into vastly unequal Conditions, that to attain their full Potential they are to be endowed by the State with an ever-expanding Set of Rights, that among these are day Care and health Care; Contraception and Abortion; higher Education, a Placement Service, and a remunerative Job; affordable Housing, pension Plans, and whatever else may contribute to Happiness—That to obtain these Rights, administrative States are established over Men and Women, deriving their just Powers from the impartial Expertise of those administering them—That whenever any new strong Desires take hold of the People, it is the Duty of their Leaders to declare them to be Rights, and to expand the scope and reach of the State, laying its Foundation on such Values and organizing its Powers in such Form, as to them shall seem most likely to effect their economic Security and Happiness. Prudence, indeed, will dictate that Programs once established should not be changed for light and transient Causes; and accordingly all Experience hath shewn, that the People are more disposed to suffer, while these Programs are new, than to wrong themselves by abolishing the Forms to which they are not yet accustomed. But when a long Train of Benefits and Payments, pursuing invariably the same Object, evinces a Design to elevate them to effective Freedom, it is their Right, it is their Duty, to consolidate these Gains, and to demand new Programs, Entitlements, and Rights for their future Security. [National Review, July 3]

On the other hand, here are some words from silent Calvin Coolidge:

About the Declaration there is a finality that is exceedingly restfull. It is often asserted that the world has made a great deal of progress since 1776, that we have had new thoughts and new experiences which have given us a great advance over the people of that day, and that we may therefore very well discard their conclusions for something more modern. But that reasoning can not be applied to this great charter. If all men are created equal, that is final. If they are endowed with inalienable rights, that is final. If governments derive their just powers from the consent of the governed, that is final. No advance, no progress can be made beyond these propositions. If anyone wishes to deny their truth or their soundness, the only direction in which he can proceed historically is not forward, but backward toward the time when there was no equality, no rights of the individual, no rule of the people. Those who wish to proceed in that direction can not lay claim to progress. They are reactionary. Their ideas are not more modern, but more ancient, than those of the Revolutionary fathers. [Speech in Philadelphia, July 5, 1926]

The Department of the Treasury announced on Tuesday that it would not enforce the ObamaCare employer mandate until 2015. That means businesses won’t have to worry about providing qualifying health insurance to their employees or paying a penalty. But the individual mandate is still in place. Some individuals who were counting on getting qualifying health insurance from their employer may now have to get it from an ObamaCare exchange—or pay a penalty (tax, per the Supreme Court).

The ostensible reason for the delay is that the reporting requirements need to be simplified in order for businesses to comply. If businesses don’t have to report what insurance benefits they provide their workers, the employer mandate cannot be enforced. Further, Michael Cannon argues that ObamaCare’s other provisions won’t work either:

[W]ithout that information on employers’ health benefits offerings, the federal government simply cannot determine who will be eligible for credits and subsidies. Without the credits and subsidies, the “rate shock“ that workers experience will be much greater and/or many more workers will qualify for the unaffordability exemption from the individual mandate. Either way, fewer workers will purchase health insurance and premiums will rise further, which could ultimately end in an adverse selection death spiral. The administration can’t exactly solve this problem by offering credits and subsidies to everyone who applies, either. Not only would this increase the cost of the law, but it would also lead to a backlash in 2015 when some people have their subsidies revoked. [Cato Institute, July 3]

The real reason for the delay is probably the same reason for all the other Obama administration decisions to deviate from the law without authority (at least the seventh such instance, says Cannon): politics. In 2015, another election and another “recovery summer” will have passed, making it politically a safer time to risk job-killing taxes. But what hurts job growth in 2014 will surely hurt job growth in 2015, too. Why not just repeal the whole thing permanently?

Justice Anthony Kennedy’s refusal to consider the Defense of Marriage Act using a relaxed “rational basis” test in Windsor has “ratified a sea change in constitutional jurisprudence,” says Richard Epstein. But it is a confusing sea change:

Justice Kennedy could have said openly that tradition should not count, or at least not count for very much, on the constitutional scales of justice. But on this occasion, his argument against DOMA was not the straight up “equal protection” argument that the Court finessed by invoking standing in Perry.

Rather, Kennedy’s lead argument (in this age of boundless federal power) was that the definition of marriage is properly left to the states. And why: “By history and tradition the definition and regulation of marriage has been treated as being within the authority and realm of the separate States.” Oh. What, then, of Proposition 8?

So a question then arises: If the allocation of power between the two levels of government should be controlled by tradition, why does the definition of marriage traditionally used by all states now fail at the federal level? The point is particularly odd in this context given that DOMA says nothing about how states regulate their own definitions of marriage, but only determines how the federal government defines marriage for the purpose of distributing federal benefits—which has to be regarded as a core federal function. Of course, the federal government can follow state definitions, but it need not, and as Justice Kennedy himself notes, does not do so in defining marriage in immigration cases.

At this point, moreover, Justice Kennedy only compounds the confusion. If the federalism issue controls, those states that adhere to traditional definitions of marriage now control how the federal government distributes its benefits, so that it appears, at least for a nanosecond, that the United States could not constitutionally define marriage to include same-sex couples under DOMA for potential recipients who live in states that follow the traditional definition of marriage.

As Heritage Foundation President Jim DeMint notes, the Supreme Court last week failed to consider the actual arguments made by supporters of the traditional definition of marriage and instead concluded that the only purpose of the Defense of Marriage Act was to “disparage,” “injure,” “degrade,” “demean,” and “humiliate” homosexuals. DeMint outlines the argument that the Supreme Court chose not to hear:

It is outrageous to suggest that 342 Members of the House, 85 Senators, and President Bill Clinton were all acting on the basis of anti-gay bias in 1996, when the Defense of Marriage Act (DOMA) was enacted. As Chief Justice Roberts says in his dissent, “I would not tar the political branches with bigotry.”

For now at least, the Supreme Court has left it up to each state to define marriage as it wants, and 38 of them have defined it as a union of one man and one woman. To get a free copy of the new e-book Why Uphold Marriage?, go to www.heritage.org/marriage/.

Kenneth Minogue, one of the great political thinkers of the past 50 years, died unexpectedly on Friday following a meeting of the Mont Pelerin Society in the Galapagos Islands. He was 82.

Minogue’s books, beginning with The Liberal Mind(1963), challenged the pretenses of the liberal world view. In The Liberal Mind, he described liberalism this way:

The story of liberalism, as liberals tell it, is rather like the legend of St. George and the dragon. After many centuries of hopelessness and superstition, St. George, in the guise of Rationality, appeared in the world somewhere about the sixteenth century. The first dragons upon whom he turned his lance were those of despotic kingship and religious intolerance. These battles won, he rested for a time, until such questions as slavery, or prison conditions, or the state of the poor, began to command his attention. During the nineteenth century, his lance was never still, prodding this way and that against the inert scaliness of privilege, vested interest, or patrician insolence. But, unlike St. George, he did not know when to retire. The more he succeeded, the more he became bewitched with the thought of a world free of dragons, and the less capable he became of ever returning to private life. He needed his dragons. He could only live by fighting for causes—the people, the poor, the exploited, the colonially oppressed, the underprivileged and the underdeveloped. As an ageing warrior, he grew breathless in his pursuit of smaller and smaller dragons—for the big dragons were now harder to come by.

Most Western governments hate me smoking, or eating the wrong kind of food, or hunting foxes, or drinking too much, and these are merely the surface disapprovals, the ones that provoke legislation or public campaigns. We also borrow too much money for our personal pleasures, and many of us are very bad parents. Ministers of state have been known to instruct us in elementary matters, such as the importance of reading stories to our children. Again, many of us have unsound views about people of other races, cultures, or religions, and the distribution of our friends does not always correspond, as governments think that it ought, to the cultural diversity of our society. We must face up to the grim fact that the rulers we elect are losing patience with us.

Conservatives are remembering Minogue this week for his many contributions to the cause of a free society. Ed Feulner, Founder and longtime President of The Heritage Foundation, was tutored by Minogue at the London School of Economics in 1965. Feulner, who was with Minogue in the Galapagos Islands shortly before he died, writes:

Born in New Zealand, reared in Australia, educated in Britain, a teacher there and in the United States, and an international lecturer, Ken Minogue brought political thought home to generation after generation of students. Those who assumed liberalism’s benevolence were challenged, and those skeptical of liberalism were given the intellectual armor for combat.

Yet Ken was much more than a lecturer and teacher. He lent his name and considerable talents to organizations around the world promoting freedom. From 2010 to 2012, he served as the president of the Mont Pelerin Society, an international group of advocates for the free society, of which I am a member. As a frequent attendee at the society’s gatherings, Ken could always be counted on to remind us of the past’s connection to contemporary issues. [Wall Street Journal, June 30]